• Leading venture capital firms such as Sequoia Capital, Thoma Bravo, and Paradigm have been sued for allegedly promoting the legitimacy of the now-bankrupt cryptocurrency exchange FTX.
• Sam Bankman-Fried, Joseph Bankman, Caroline Ellison and Gary Wang have all been subpoenaed to appear in court on February 17th and 16th respectively.
• The lawsuit claims that the venture capital firms leveraged their professional reputations and media outreach capabilities to portray FTX as a trustworthy platform.
Sequoia Capital, Paradigm and Thoma Bravo Accused of Promoting Legitimacy of FTX
Leading venture capital firms such as Sequoia Capital, Thoma Bravo, and Paradigm are facing a lawsuit for allegedly hyping up the legitimacy of the bankrupt cryptocurrency exchange FTX.
Subpoenas Issued to Key Figures
Sam Bankman-Fried has received a subpoena as part of this case against these organizations he founded. His father Joseph Bankman along with Alameda Research’s former bosses Caroline Ellison and Gary Wang will also be summoned in court on February 16th and 17th respectively.
The lawsuit claims that due to their significant investments in FTX entities each firm was incentivized to leverage their professional reputations and media outreach capabilities to portray FTX as a trustworthy crypto exchange platform.
In November 2020, FTX collapsed causing investor losses amounting to billions of dollars along with immense damage to the digital asset sector’s reputation.
As a result of this case against major private equity firms such as Sequoia Capital, Thoma Bravo, and Paradigm it is hoped that justice will prevail so investors can recuperate their losses caused by FTX’s collapse last year.